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Banksia Securities debenture holders get first payout

MARK COLVIN: To Sue Lannin with today's business and finance. The trade deficit has blown out.

SUE LANNIN: Yes, widened in October; imports outweighing exports. The main reason for that, Mark, actually is that the imports of capital goods increased like aircraft, not necessarily a bad thing of course. We're getting lower export prices as well and volume so the trade deficit expanded by nearly 50 per cent; just over $2 billion in October.

MARK COLVIN: Pardon my ignorance but what is Banksia Securities and why is it in the news today?

SUE LANNIN: Banksia Securities is a debenture company. So a debenture is like a certificate on indebtedness. You give say $20,000 to Banksia Securities; they then lend your money to someone for a mortgage.

So this is a, it collapsed in October. It's part of what's known as shadow banking, which the corporate regulator ASIC (Australian Securities and Investments Commission) says needs to be regulated.

There was another company that went under earlier in year, Provident Capital. So the banks…

MARK COLVIN: So these are people who thought that they'd lost all their money and now they're getting some of it back?

SUE LANNIN: Yes, so it's actually quite good news. They've got 20 cents in the dollar and they may get up to 65 cents in the dollar.

These are people in regional Victoria.

MARK COLVIN: Sharemarket today?

SUE LANNIN: Yes, went well; higher iron ore prices and the banks were covered. So the All Ordinaries index up 40 points, or nearly 1 per cent to 4,556.